2021 Real Estate Observations (Marlborough, Acton: general contractor, plumbing, retiree)

[wolfgang239]

Originally Posted by id77

This might just be a technicality on my part but when I do PITI calculations I also include HOA fees and annual homeowners insurance, which aren't part of (most) mortgage payments.

I get where you are coming from with that, but some places have a pool, elevator, gym, 100+ units to spread costs around etc. Definitely a consideration when budgeting a move somewhere but not easy for comparisons.

[matrix5k]

Originally Posted by jayrandom

Gross pay means before any deductions. Net pay is "take home". PITI stands for Principal, Interest, Taxes, and Insurance. This is typically what most people pay to their mortgage servicer.

As an example, if you and your partner had a gross income of $240k/year and you had a monthly mortgage payment of $5k, that would give you 20% ($5k*12/$240k = 0.2). The general rule is to never exceed 28%. You wouldn't know it from this board, which skews excessively conservative, particularly for this unreasonably high cost of living area. Anyone brave enough to post has been below 20%, with the typical number being around 15%. Of course, aiming for a lower number will keep you from being "house poor", but especially for new homeowners in greater Boston 15% is an unrealistic number. It's also much easier to be below that threshold the more you make. It's easy to "be safe" and choose the $3m SFH in Brookline over the $5m mansion in Newton, but when $300k gets you condo in Brockton it might make long-term financial sense to stretch for a $500k SFH in Stoughton.

I don't know exactly how much my wife makes, but I would guess my PITI is about 20%. It was closer to 15% before the pandemic, but we refinanced to a 15 year mortgage in the hopes of having no mortgage when our oldest started college.

Thanks. Bought current home 3 years ago, we are at about 13% so I guess we're not house poor. The down payment came from selling our first home 5 years ago.

But we spend a lot elsewhere. My wife probably spends $1,000/mo at Costco for example.

[bricka]

Originally Posted by matrix5k

Thanks. Bought current home 3 years ago, we are at about 13% so I guess we're not house poor. The down payment came from selling our first home 5 years ago.

But we spend a lot elsewhere. My wife probably spends $1,000/mo at Costco for example.

if you have kids and you are doing most of your grocery shopping there that number doesn't seem outrageous. groceries are expensive now

[massnative71]

Originally Posted by id77

That's interesting on the insurance. This might be a SFH vs condo thing as I've had 3 mortgages and never once had it included nor had to pay to exclude it. They do verify the master insurance (HO-2 covered via HOA fees) is adequate to cover structural, but remaining homeowner insurance (HO-6) is my problem and not included in the mortgage.

When I first owned my condo, I was on my own with the HO-6. But when I refinanced (with the same bank I might add) back in 2011, it was a requirement that I had that coverage and that it was escrowed.

[id77]

Originally Posted by massnative71

When I first owned my condo, I was on my own with the HO-6. But when I refinanced (with the same bank I might add) back in 2011, it was a requirement that I had that coverage and that it was escrowed.

Do you know if the master insurance policy changed over that time? I can see this happening if the HO-2 was modified in some way, or the bank's acceptable coverage minimum changed, so that when they re-assessed it no longer met their underwriting requirements.

[massnative71]

Originally Posted by id77

Do you know if the master insurance policy changed over that time? I can see this happening if the HO-2 was modified in some way, or the bank's acceptable coverage minimum changed, so that when they re-assessed it no longer met their underwriting requirements.

I don't think it would have changed much. Just tighter standards vs. pre-crash (or maybe specifically a refi thing?).

[BostonMike7]

Originally Posted by matrix5k

But we spend a lot elsewhere. My wife probably spends $1,000/mo at Costco for example.

Food is probably definitely one of our biggest costs, if not the largest. I bet if I did the math, or would exceed our housing costs.

Family of 5, with 3 boys who are starting to eat like it's their last meal.

[msRB311]

Originally Posted by matrix5k

Thanks. Bought current home 3 years ago, we are at about 13% so I guess we're not house poor. The down payment came from selling our first home 5 years ago.

But we spend a lot elsewhere. My wife probably spends $1,000/mo at Costco for example.

right people try so hard not to be house poor in this crazy market but spend crazy amounts on food. I get it, if you have a family they need to eat.

I think it's been mentioned before but i have friends who spend a lot on things like clothes, hair, gym memberships, even botox and other spa treatments. I definitely feel like there are some luxury items people could think about cutting out before getting so nit picky about what they spend on a house. People spend exorbitant amounts on vacations but that seems to be ok but spending too much on a house beyond your means is like the worst thing one can do apparently.

[msRB311]

I think there was another thread where people were trying to describe people who spend lots on botox/boob jobs. What i was trying to describe was this type of person:

https://tbdailynews.com/abington-sug...-social-media/

Apparently she does/did have someone else paying for it.

[BostonMike7]

Poor kids